What You Need to Know About Homeowners Insurance as Beryl Kicks Off Hurricane Season

Hurricane Beryl is set to hit the Caribbean this week, potentially foretelling a severe hurricane season.

The Category 5 storm is the strongest hurricane to form in June, according to University of Miami researcher Brian McNoldy. Such strong storms so early on in the year increase the likelihood of devastating storms as the peak hurricane season is still months away.

As more severe weather events crop up across the country, it can pay to review your insurance policy coverage and know more about trends across the industry.

Homeowners Insurance is Already Getting Pricer

Climate change has increased the number and intensity of extreme weather events, costing the United States almost $25 billion through May, according to a report by the National Centers for Environmental Information. That is more than twice the average for that time each year.

Inflation and an increasing number of extreme weather events are causing insurance companies to pay out more claims. In turn, insurance providers are increasing customers' premiums.

According to the Consumer Price Index, total dwelling-related insurance payments for renters and homeowners increased in 2023 for the first time in four years. This year, the average insurance costs are expected to be $2,522 and they are predicted to increase by 6% over last year, according to a study by insurance marketplace Insurify.

Where you live also determines how much you pay for homeowners insurance. People who live in areas such as Louisiana and Florida will see higher premiums to account for severe weather conditions and lack of options when homeowners shop for insurance.

Homeowners Insurance is Getting Harder to Come By

Last year, some insurance companies announced that they would no longer cover certain areas that are more likely to be hit by extreme weather. 

State Farm announced that it will no longer offer coverage in California due to risks caused by the state's increasingly frequent wildfires.

If you do get dropped by your insurance due to severe weather, you can inform your mortgage lender and they may provide you with force-placed insurance. This kind of insurance can cost up to twice as much, so this is normally used as temporary insurance until you can find another provider.

Places that experience extreme weather are also more likely to be covered by the Fair Access to Insurance Requirements (FAIR) Plans. This plan, as well as Beach and Windstorm Plans, may be able to provide you coverage if you were dropped by your insurance because you live in a location with extreme weather.

Basic Homeowners Policies Don't Cover All Severe Weather

Basic homeowners insurance has never covered floods, mold, or wind peril in the places most affected by hurricanes. Damage from storms can have serious consequences—a home in a high-risk area has a 26% chance of being damaged by flooding over 30 years, and even one inch of water can cause $ 25,000 worth of damage.

The best thing to do in this situation is to prepare your house before it can be damaged by severe weather. Raising your home to prevent flooding or retrofitting your home to withstand high winds can not only protect your house but some insurances offer reduced premiums if you do this.